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Steve (age 40) and Edie (age 39) Brady are married. Steve works as a retail manager and Edie is a self-employed architect but does not

Steve (age 40) and Edie (age 39) Brady are married. Steve works as a retail manager and Edie is a self-employed architect but does not maintain a home office. She does NOT qualify for the Qualified Business Income (QBI) deduction. Their 2019 tax and other information are as follows:

Salary Steve

70,000

Federal withholding on salary

10,000

State withholding on salary

4,000

Interest income on municipal bonds:

State of Connecticut

1,000

Savings account interest

1,500

Dividends from RGR, Inc. (all are non-qualified)

2,500

Value of employer provided medical insurance

3,000

Inheritance from Steves fathers estate

9,000

Interest paid on personal car loan

1,800

Interest paid on personal loan

1,100

Child support paid to Steves ex-wife

10,000

Alimony paid to Steves ex-wife divorced in 2010

8,000

Qualified Out of Pocket Medical Expenses

3,700

Donations to church

Real Estate taxes on primary residence

2,200

6,000

Mortgage interest on primary residence (<$1M)

4,000

Edies business revenues

58,000

Edies business expenses

25,000

Required: Using the tax formula format, determine the following for the Bradys 2019 tax year (show all calculations):

  1. All Income $___________

  1. Exclusions (if any) $ ___________

  1. Gross income (including Edies SE income) $ ___________

  1. Deductions For AGI $ ___________

  1. Adjusted gross income $ ___________

  1. Itemized deduction or standard deduction amount $ ___________

  1. Deduction for exemptions $ ___________

  1. Taxable income $ ___________

  1. Income tax liability $ ___________

  1. Self-employment tax liability $ ___________

  1. Net tax due or refund (show calculation) $ ___________

Remember: This is for the 2019 tax year. You must use appropriate 2019 amounts for standard deduction, exemptions, and tax calculations.

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